Tax records in Pittsfield and North Adams show both cities are losing out on well over $100,000 in tax revenue from retailer Wal-Mart. But as our Berkshire County reporter Brandon Walker discovered, Wal-Mart isn't at fault. Instead, the loss is due to a state-sanctioned change in what can, or cannot, be taxed.

NORTH ADAMS, Mass. -- Retail giant Wal-Mart inches closer to breaking ground on a new super center along Route 8 in North Adams. The store will replace its current location roughly two miles further up the road. Though, what could very well lead to a hiring boom, seems more like a bust for the tax rolls.

"With respect to Wal-Mart, it took about $4 million worth of their personal property inventory," said Richard Alcombright, Mayor of North Adams.

Here's the issue. A typical Wal-Mart is big and needs a lot of containers, shelves and refrigeration units to hold all of that merchandise. At one point, cities in Massachusetts could tax those items, part of what's considered personal property. But not anymore.

"That's somewhere in the vicinity of about $140,000 a year that became non taxable," Alcombright said.

About a 30 minute drive south to Pittsfield and it's the same concern. In fact, tax documents show Wal-Mart contributed roughly $24,500 in personal property taxes to the city, a loss of almost $187,000 from last fiscal year.

"There's no way that this should be happening in my opinion. Yes they're probably doing it legally with the right loopholes," said John Krol, city councilor, Pittsfield Ward 6.

And they are, though, it turns out the loophole is a change in how the state says Wal-Mart is defined as a corporation. Those refrigeration units, shelving and other items were taxable under state tax code 501.

Though, Wal-Mart now falls under Code 502, meaning only pipes, wires, sales scanners and machinery used solely to conduct business are taxed.

North Adams' Richard Alcombright says the city had to look elsewhere to make up the loss in order to keep the budget balanced.

"Then the residential burden grows, and in this case what happened was instead of going up 3 point 2 percent, residential taxes went up about 5. 6 percent this year," Alcombright said.

"[Wal-Mart is] now paying a significant amount less in taxes. It's just unconscionable, especially right now in this economy," Krol said.

Though, again, it's legal. As for a possible solution? No one knows. Both Alcombright and Krol say they will contact their state representatives for input.